Daimler Cuts 2013 Profit Target After First Quarter Drop image

Daimler has cut its profit forecast for this year after earnings during the first quarter fell more than analysts’ predictions and sales in China were weaker than expected.

“In the first three months of this year, many markets developed worse than expected for economic reasons, especially Western Europe, ” Chief Executive Officer Dieter Zetsche said in the statement.

Since Mercedes lost the first place in global luxury auto sales to BMW in 2005, it has been falling further behind also losing the second place to VW’s Audi in 2011. As Germany has began to be affected by the economic crisis in Europe and Daimler’s sales in the home region have dropped more than in the past, the automaker also fell 11% in China. Earnings before interest and taxes during the first quarter dropped from 2.1 billion euro last year to 917 million euro, missing the analysts’ estimates of 1.06 billion euro.

“The results are a little disappointing,” said Christian Ludwig, a Dusseldorf-based analyst with Bankhaus Lampe. After delaying long-term profit targets in 2012, “this year will probably be another transition year. Its guidance remains quite vague.”

Mercedes’ first quarter global sales increased 3.5% to 324,898 units, thanks to increased demand for the A- and B-Class compacts and the M-Class SUVs, compares with Audi’s jump of 6.8% to 369,500 units and BMW’s increase of 7% to 381,404 units.

Source: Bloomberg